HomePublicationsNewsletter ArchiveNewslettersVolume 21Issue 10U.S. House Holds Hearing on Bill to Ban Online Gaming

On Wednesday, March 25, 2015, the U.S. House Subcommittee on Crime, Terrorism, Homeland Security and Investigations held a hearing on House Resolution 707, the Restoration of America’s Wire Act (“HR 707”). If passed, the legislation would generally ban online gaming activity throughout the country by clarifying that the Wire Act applies to wagering other than merely sports wagering.

Wednesday’s hearing featured five witnesses: Mr. John Warren Kindt, Professor Emeritus of Business Administration, University of Illinois School of Law; Mr. Les Bernal, National Director, Stop Predatory Gambling Foundation; Mr. Michael K. Fagan, Adjunct Professor of Law, Washington University School of Law; Mr. Andrew Moylan, Executive Director and Senior Fellow, R Street; and Ms. Parry Aftab, Executive Director, Wired Safety.

The legislation has been sponsored by Rep. Jason Chaffetz (R-Utah) and has been designed to rollback changes in the interpretation and application of the Wire Act, which has allowed for the expansion of online, intrastate gaming activities for states that choose to authorize such activity. Committee members raised questions regarding the accuracy and sufficiency of geo-tracking software, if online gambling will allow for increased money laundering activities, and whether expansions of online gaming will result in measurable social harms.

The witnesses were split on their support for the bill, with Mr. Kindt, Mr. Bernal, and Mr. Fagan noting their support of the legislation and Mr. Moylan and Ms. Aftab opposing the bill. Those witnesses supporting the bill noted their concerns regarding the ability for state governments to effectively regulate Internet gaming activity to prevent money laundering and other organized crime, that online gaming will result in the spread of social harms associated with gaming, and that the Department of Justice’s 2011 reinterpretation of the Wire Act was inappropriate.

In opposing the bill, Mr. Moylan noted, under the traditional federal system, that states should have the right to develop their own independent laws, regulations, and policies related to gaming activity. Ms. Aftab further noted that the recent legalization of forms of online gaming has resulted in the decrease in illegal online gaming activities due to the activity being regulated. 

 

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